1) Explain the legal and regulatory aspects of board management and good practices.
* Separate legal personality
* Corporate liability
* Duty to Act in Good Faith and for Proper Purpose s132(1)
* Hogg v Cramphorn Ltd  Ch 254 – TB
* Multi-Pak Singapore Pte Ltd v Intraco Ltd  2 SLR 282
* Creanovate Pte Ltd and another v Firstlink Energy Pte Ltd and another appeal  4 SLR(R) 780
* Bishopsgate Investment Management Ltd v Maxwell (No 2)  BCLC 814
* Discharge of the Duty to Exercise Reasonable Care and Skill s132(1)
* Lim Weng Kee v PP  4 SLR 327
* Dorchester Finance Co Ltd ...view middle of the document...
8. Text book- Chan & Koh Malaysian Company Law Second Edition
12. MS Word Doc- Denis Keenan July 2002 Update Number 4 Pearson Education Limited
A company is regarded as a distinct legal entity with a separate existence from its membership and management team. The corporate veil is “drawn” between the corporate entity and the membership and management of a company so as to separate its independent legal existence from that of its human constituents. In this case Mr Salomon a shoe manufacturer had sold his business to a limited liability company where he and his wife and five children where the shareholders and directors of the company. Mr Salomon owned 20,001from the 20,007 shares of the company with the remaining 6 shared equally amongst his wife and children. The company ran into some financial difficulties and sorts a loan of £5,000 from one Mr Edmund Broderip who granted the loan. Subsequently the company went into more financial difficulties and was unable to pay its debt of which an action for liquidation was carried out against it. When Mr Edmund's failed to realise his unsecured loans he instituted an action claiming for Mr Salomon's personal liability. The High Court and Court of Appeal held Mr Salomon liable. Upon appeal to the House of Lords, it overturned the decision arguing that a company had been duly created and cannot be deprived of its separate legal personality. (13)
Directors owe a duty to the company to act in its best interests in good faith and for proper purpose. (1) A director of a company must not put himself in a position where his duty to the company conflicts with his personal interest; nor must be use the powers and assets of the company entrusted to him for improper purposes. (8) In Hogg v Cramphorn Ltd, Mr Baxter approached the board of directors of Cramphorn Ltd. to make a takeover offer for the company. The directors believed that the takeover would be bad for the company. So they issued 5707 shares with ten votes each to the trustees of the...